Gillard warns states on hospital funding

Date: February 21 2013

Adam Bennett

Prime Minister Julia Gillard has accused the Victorian Premier of a "grand act of incompetence" in his handling of the state's hospital funding and warned other states they too could have their budgets rearranged.

The Labor federal government has sought to appease patients and resolve an ongoing dispute with the state by bypassing the Liberal government and paying $107 million directly to hospital administrators.

But Victoria will be penalised for the additional hospital funding, with Labor set to strip the state of $107 million in other commonwealth payments.

Ms Gillard dismissed Victoria's claims the federal government had used faulty population data to slash $475 million from the state's health budget over four years, including $107 million this financial year.

Instead, she accused Premier Ted Baillieu of cutting $616 million from state hospitals and mounting a "very dishonest campaign" about healthcare funding.

"This is a grand act of incompetence by Premier Baillieu which will be judged by the Victorian people," Ms Gillard told reporters in Adelaide.

"He could have kept money flowing to health. He deliberately decided not to do it.

"Well, if he is going to play that kind of politics, I'm not going to see patients suffer, so we've gone round him.

But the Gillard government's about-face on Victoria immediately led Queensland's Liberal National Party and NSW's coalition governments to demand the return of their states' funding.

Queensland Health Minister Lawrence Springborg says his state will lose $103 million in federal funding this financial year.

NSW Health Minister Jillian Skinner says a similar population adjustment has left her state out of pocket to the tune of $50 million a year.

"This strange deal to directly fund hospitals in Victoria does not relieve the federal government of its responsibility to restore health funding to all states and territories," Mrs Skinner told AAP.

Ms Gillard warned any premier or chief minister thinking of mounting a Victorian-style campaign on hospital funding her government wouldn't tolerate them playing politics on health.

"There is a very clear message to those premiers - we will go around you, we will deal direct with hospitals and local hospital networks, and we will rearrange your budget," she said.

"We will deal direct with hospitals and we will cut them back in another area."

Federal opposition health spokesman Peter Dutton believes the states are right to ask why Victoria is the only state to have its hospital funding effectively restored.

"Labor now needs to explain why a retrospective cut to hospital funding is still acceptable in NSW, Queensland and elsewhere," he said in a statement.

"It is government incompetence at its worst."

Mr Baillieu described the decision by federal Health Minister Tanya Plibersek as a "sleight of hand".

"This is a short-term political fix," he said.

In its mid-year budget update in October, the federal government said national health reform funding would be $245 million lower in 2012/13.

Funding levels have been based on population growth outcomes, health price inflation and the lower cost of medical equipment due to the high Australian dollar.

Australian Medical Association (AMA) president Steve Hambleton called for an end to "petty politicking" over hospitals funding.

"The bottom line is that no government should be cutting money from their health budgets, especially when they are under enormous pressure to meet demand," he said.

"Stop the fighting and start the funding."

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